Trade-Ideas LLC identified

A. Schulman

(

SHLM

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified A. Schulman as such a stock due to the following factors:

  • SHLM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $4.6 million.
  • SHLM has traded 91,314 shares today.
  • SHLM is trading at 2.34 times the normal volume for the stock at this time of day.
  • SHLM is trading at a new low 4.01% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on SHLM:

A. Schulman, Inc. manufactures and supplies plastic compounds and resins. It offers custom performance colors, including standard and customized colors, organic and inorganic pigments, high chroma colors in translucent or opaque formats, and special effects. The stock currently has a dividend yield of 3.6%. SHLM has a PE ratio of 4. Currently there are 3 analysts that rate A. Schulman a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for A. Schulman has been 217,100 shares per day over the past 30 days. A. Schulman has a market cap of $670.7 million and is part of the basic materials sector and chemicals industry. The stock has a beta of 1.54 and a short float of 3.5% with 4.02 days to cover. Shares are down 29.1% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates A. Schulman as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and generally higher debt management risk.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 9.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 279.3% when compared to the same quarter one year prior, rising from -$0.89 million to $1.59 million.
  • SCHULMAN (A.) INC has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SCHULMAN (A.) INC reported lower earnings of $0.83 versus $1.82 in the prior year. This year, the market expects an improvement in earnings ($2.41 versus $0.83).
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Chemicals industry and the overall market, SCHULMAN (A.) INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • SHLM's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 46.05%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, SHLM is still more expensive than most of the other companies in its industry.

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